A number of chemical and pharmaceutical industries have opened since 1978 in the Patancheru Industrial Development Area of Medak district, Andhra Pradesh, India. Both treated and untreated effluents from these industries are discharged to the Nakkavagu and Peddavagu streams and the former also receives effluents from an adjacent Industrial Development area. Groundwater level and water quality monitoring have been carried out on 30 observation wells over the last two years in Patancheru and its environs covering a 120 km2 area, and a number of aquifer parameters were estimated at various pumping wells. Groundwater flow and mass transport models were prepared using visual MODFLOW software, allowing the extent of contaminant migration from Nakkavagu and other streams to be assessed for the last 20 years. The stream-aquifer interaction was found to be responsible for faster migration of contamination in the over exploited area around Nakkavagu in Arutla village.